Christine Quinn speaking at a City Hall press conference on City Council budget procedures on Fri., April 11.

Quinn must answer: What did she know and when?

By Paul Schindler

In her years in public life, Christine Quinn has deservedly earned a reputation as a progressive, in politics, as an advocate for the lesbian, gay, bisexual and transgender community, and as a tenant activist. Political reform is a cornerstone of progressive politics, and on that score, Quinn has provided leadership in her 27 months as City Council speaker.

The budget process has been made far more transparent, so it is clear at whose request so-called member items, providing money for projects championed by specific legislators, are funded. Campaign finance reform initiated by the speaker should dramatically reduce the influence of entities with any business pending before the city in next years elections. Organizations far better situated to judge these questions than this newspaper, including the government watchdog group Citizens Union and The New York Times, have lauded Quinns record on these reforms.

So it was a stunner when the New York Post reported two weeks ago that since 2001, the Council has budgeted more than $17 million dollars to fund fictitious organizations, freeing up those dollars to be distributed at the discretion of the Speakers Office for uses not specifically laid out in the annual budget. At a press conference the day the story broke, Quinn spoke to this issue at some length, but that did little to staunch a spate of news stories and editorials making liberal use of the phrase slush fund and essentially asking, What did she know and when did she know it?

In a story odd in its details and uncertain in its impact, the speaker answered some of the questions raised, but others remain stubbornly obscure. Senior Council staffers asserted that some things cannot be addressed in detail while the citys Department of Investigation and the U.S. Attorneys Office continue to look into the matter.
It is crucial, however, that the full details are spelled out at the earliest possible date.

First, what we know:

In the current fiscal year, the allocations totaled $4.5 million in an annual budget of nearly $60 billion. The speaker has provided a list of all expenditures eventually made from the funds budgeted for the phony organizations and they are all legitimate; theyve gone to bona fide groups, such as Friends of the High Line, the Brooklyn Museum, the Botanical Gardens and the 92nd Street Y, all of which receive money under the formal budget, as well. There has been no suggestion  in fact, all evidence is to the contrary  that any individual personally profited in a manner at odds with appropriate use of government funds.

Quinn stated that money has been set aside in what are known as holding codes  to make up for budget shortfalls and oversights  in a practice dating back at least 20 years. Former Council Speaker Peter Vallone, Sr., confirmed as much in comments to the press, explaining that excess funds might be allocated, for example, for snow removal and later diverted to keep libraries open.

But it is clear that the amount of such discretionary monies rose dramatically beginning with the 2002-2005 speakership of Quinns predecessor Gifford Miller  from less than $1 million a year in 2001 to $4.5 million by this year. Quinns team explains she was generally aware, even before becoming speaker, of undesignated, discretionary budget dollars, but was not able to focus on the issue in detail until she undertook her second budget last spring. Concluding that reserves of this magnitude were inconsistent with the transparency she had brought to the earmarking process generally, they say, she ordered the practice to end, only to learn late last year that the Council finance staff did not heed her instructions.

This point has been confused in much of the reporting, a number of accounts suggesting she learned of the fictitious organizations last spring and that her order to contravene that practice was ignored. Her aides said she leaned about the phony names only at the end of 2007, at the time she discovered her order to end the reserve set-aside had not been carried out. Quinn says when she learned about the fictitious names, she reported that information to the Department of Investigation and the U.S. Attorneys Office. Some have questioned whether she was truly a whistleblower, since investigations were already ongoing; but the speaker and her staff maintain that it was those broad inquiries on unrelated matters that brought the accounting deception to her attention, and she passed along that information at once.

Nobody has offered an explanation on how or why the fictitious names were developed, though, since their existence predates her time as speaker, Quinn may not be the best person to answer that question. As to her staffs culpability and whether anyone has been fired, she told reporters she would not speak to personnel matters but hastened to add that the two top finance people had left the Council.

Her finance director, Michael Keogh, has since joined Bolton-St. Johns, a lobbying firm where Emily Giske, a top official in the state Democratic Party and close ally of the speaker, also works. Quinns communications chief Jamie McShane said the speaker played no role in Keogh landing that job, and Keogh has told reporters he is cooperating with investigators.

The most critical questions that must be answered relate to how the distributions of the discretionary money were made. Technically, it was a process Quinn controlled, but McShane, citing the ongoing investigations, was unable to provide the specifics on how funding decisions were made. If Quinn herself made the decisions, she ought to explain where she thought the money was coming from.

Reporting in the Post pointed out that board members of some of the groups funded are Quinn political contributors. However, the couple of instances cited were not particularly impressive given that nonprofit board members and major political donors are drawn from the same strata of society.

More troubling is the fact that 24 percent of the distributions in fiscal year 2007 went to Quinns district, though McShane notes that many of the recipients, including the L.G.B.T. Callen-Lorde Community Health Center and the American Folk Art Museum, serve a citywide constituency.

Still, whenever discretionary funding authority is at issue, particularly in connection with bogus accounting tricks, it is critical to establish that appropriate decision-making was in place.

Is this a gay issue? Like all New Yorkers, the L.G.B.T. community is concerned that its tax dollars are spent appropriately and wisely.

More to the point, of course, is the symbolic role Quinn plays in the L.G.B.T. community. When, as expected, she runs for mayor next year, she will not get every L.G.B.T. vote, but it would be the rare queer New Yorker who would not in some sense feel she is carrying the aspirations of all gays and lesbians on her shoulders as she enters the field. Christine Quinn has brought a compelling story of achievement by an out lesbian to New Yorks public life. Putting this matter quickly and convincingly behind her is something we should all be insisting on.